Tag: advice

Why I chose to enter

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Divesh Ramdhass, owner of Pharmacy at Spar Northway and 2013 competition entrant, shares some information with us about his business, insight into the pharmacy industry and discusses why he decided to enter the competition.

Briefly describe your business and the industry you operate in?

Pharmacy at Spar Northway was opened in December 2012 after being in operation for seven years as an independent stand-alone pharmacy, Northway Family-Care Pharmacy.

The pharmacy is community-based and focuses on the procurement, storage, compounding, counselling and dispensing of prescription drugs to patients. Always keeping our patients’ best interest at heart, we ensure that our services are completed with care and accuracy.

Another division of Pharmacy at Spar Northway sells over-the-counter medication to patients. Our specially trained staff make certain that all patients are advised on how to use the medication, what it is needed for and what the adequate treatment would be.

Other additional services we offer are through our in-store primary health care clinic facility which offers specialist health checks, such as blood pressure, diabetes and cholesterol monitoring, drug screening, prostate irregularity checks, as well as weight reduction programmes.

Where did the business concept originate from and when did you start your business?

Pharmacies operate in an extremely demanding marketplace, where competition can be described as vigorous. The days of the independent retailer are numbered, and as a professional I was not willing to compromise my profession.

This led me to the decision to remarket and reintroduce my pharmacy to the community. My business concept comprised of a fresh and modern approach to a pharmacy that attracted not only those in need of medication, but also targets those in search of future health. The concept was to change the dull and boring image of the pharmacy by implementing a bright and vibrant atmosphere that would motivate the community to make use of.

Have you always aspired to start your own business?

The aspiration to open my own practice stemmed from the love that I have for my profession. I love being a pharmacist and that motivated me to start my own practice. I firmly believe that being a good pharmacist is dependent on your ability to maintain a good relationship with your customers, as this allows you to understand their needs, their conditions and makes treating their ailments much more effortless.

Briefly describe some of the challenges that you have experienced as an entrepreneur?

Being an entrepreneur is fraught with difficulties. At tertiary level you are trained to become a professional, but most entrepreneurs are never given any formal education on managing a business.

In the pharmaceutical sector where medical aids force members to get their medication from specific service providers to eliminate any short payments, decisions have to be made to ensure patients stay rather than stray. At the end of the day a good caring attitude ensures that my patients return to my store.

What advice would you give to aspiring entrepreneurs?

No road is a smooth journey. In order to make your business a success you must keep your head up and follow through on your business plan, no matter how bleak your situation may seem. Believe in yourself and your employees, for that alone is motivation to keep your business momentum going. Make sure that all decisions are made carefully.

Why did you decide to enter the Sanlam / Business Partners Entrepreneur of the Year® competition?

This competition serves as a reminder that nothing is impossible. As my wife quotes to me “nothing is impossible… it’s all in the word… I’m possible”. This motivates me to achieve even further heights. The competition reminds of the importance to maintain the standard of my practice and think beyond the boundaries of my business. In addition, it gives me the exposure to drive my business forward.

Why would you recommend that fellow entrepreneurs get involved with initiatives such as Sanlam / Business Partners Entrepreneur of the Year®?

Our country lacks the passion of entrepreneurs. Such competitions instil a sense of passion and motivation in those who have the skills and knowledge to become entrepreneurs in a country in dire need of their skills.

It encourages more and more people to take their ideas and skills to institutions such as Sanlam and Business Partners Limited, who can assist them in cultivating those skills and ideas into a required resource and service that South Africa desperately needs.

The do’s and don’ts of business expansion

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At one time or another, every business goes through a growth spurt and, whether it’s a multi-national corporation or an entrepreneurial enterprise, expansion is a tough process to navigate. The real danger for any expanding business is that it does so too quickly or in an uncontrolled way. When this happens, cash flow and customer satisfaction are usually the first casualties and, in extreme circumstances, negative cash flow and dissatisfied customers can result in the demise of a previously-flourishing concern. The trick, then, lies in managing the growth process in order to reap the benefits in both the medium- and long-term.

Are there any simple rules to follow when facing a business expansion? Naturally, every business has its own challenges, so one can’t really say that there are any rules to stick to when undertaking an expansion. There are however, important things to bear in mind and some pitfalls to avoid in order to manage the process optimally.

Plan Your Expansion

It may seem self-evident that any entrepreneur undertaking a business expansion would do so in a planned way. The truth is that many businesses expand in reaction to circumstances and don’t draw up a solid expansion plan. Without this roadmap, it’s easy to get lost along the way, making changes to your business that are either too costly or are ill-advised.

During the planning phase, ask yourself:

  • What is the real demand for our products or services at present?
  • What is the projected demand for our products or services over the next two to five years?
  • How big do we need to grow in order to meet that demand?
  • How will changing competitor activity affect our business over the next two to five years?
  • What should our excess capacity for unusual demands be?
  • What are the steps needed in order to expand in a planned, profitable way?
  • How many additional staff will be needed and when should they best be employed?
  • What is the best way in which to phase the expansion so that cash flow isn’t compromised?
  • Where can we achieve economies of scale i.e. where will expanding capacity reduce our cost of sales?

Don’t Over-Expand

While planned expansion can take a business onto a whole new level, over-expansion is one of the most significant perils of a growth phase. It’s easy to get carried away in the heat of the moment and to expand beyond the needs and the financial capacity of the business.

As a rule of thumb, plan capacity based on a five-year projection of demand and allow an additional 10% of capacity over and above that for periods of heavy demand or for partial down-time in any part of your business. More than this could be very risky and leave a business with overheads it can’t cope with. Remember, a business may go through several periods of expansion and it’s best to phase these according to demand. Don’t try to account for any and every eventuality during a specific expansion phase.

Get Professional Financial Advice

Whatever the nature of your expansion, there are financial implications for the business and it’s always best to seek professional advice. If you need to build or purchase your own premises, for instance, it’s important to speak to a financial institution that has experience in this area. For plant and equipment, you may need to consider a flexible financing option, either a loan or a combination of a loan and an equity investment. Again, an institution with experience in the field and in your own industry is essential.

Shop Around

As a wise veteran of business once said, “once the money’s spent, it’s spent – and there’s no going back”. In the life of a business, a major expansion is a bit like buying a house or a car is for an individual – one of the biggest financial commitments it will ever make. This is the time to watch both the rands and the cents. Decide on what you’re looking for – in terms of property, plant and equipment, office furniture, packaging and the like – and then shop around for the best quality at the best price. This can take a bit of time and attention, but it’s inevitably worth the effort.

Develop a Project Management Schedule for the Expansion

Again, this may sound self-evident, but many businesses expand without treating the expansion like a project – one of the most significant it’ll ever undertake.

When drawing up a project management schedule:

  • Identify key deliverables.
  • Attach dates to these deliverables.
  • Identify key responsibilities.
  • Set up a regular review schedule.
  • Identify procedures for managing non-delivery on any part of the project.
  • Build in appropriate timing and financial contingencies.

Managing the process is as important as planning it and it’s important to commit to this in a formal way, building in the appropriate checks and balances.

Keep Your Customers Informed

Expansion of any kind can cause disruptions in your day-to-day operations and it’s important that your customers know what to expect. Before commencing an expansion, tell them what you’re planning and what the expected completion date is. If possible, tell them what disruptions to expect and how you’re intending to deal with them. Make your customers aware of the fact that the expansion will ultimately benefit them and tell them how. Always reassure them that you have their interests at heart during the process. Direct mailers and on-site signage are two of the most effective ways of keeping customers informed during an expansion phase.

Announce the Completion of Your Expansion

Once the expansion phase is complete, it’s important to let both existing and potential customers know about it. Tell them about the increased capacity of the business and the additional products and services that it is able to offer. Develop a special marketing offer to announce the occasion and send out media releases, especially to the local and regional press. Celebrate this moment in your business – it’s one of the best marketing opportunities you could ask for.

Too many obstacles still hindering SA’s entrepreneurial growth

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It is no secret that South Africa suffers from an unemployment crisis, with millions of people actively searching for employment. The recent Stats SA Quarterly Labour Force Survey once again highlighted this crisis, reporting that the unemployment rate has increased to 25.2% in the first quarter of 2013.

According to Christo Botes, spokesperson for the Sanlam / Business Partners Entrepreneur of the Year® competition, entrepreneurship is often promoted as a means to curb unemployment, yet despite the growing unemployment statistics, many obstacles continue to challenge entrepreneurs.

Botes points to the latest World Economic Forum (WEF) Global Competitiveness Report 2012 – 2013 which ranked South Africa 123 out of the 144 countries surveyed in terms of the burden of government regulation.

He says that the regulatory environment is seriously affecting businesses due to the cost of compliance, time and complexity. “Entrepreneurs can’t always afford to hire specialist employees or consultants to provide guidance and advice on compliance issues. Some businesses need to comply with more than 45 laws and have to submit up to 24 returns. The time that it takes to comply with all of these regulations can be a substantial cost to a business.”

Botes says that limited access to finance is another reality many entrepreneurs continue to face. “Small businesses often find that they do not qualify for credit due to low collateral and too high debt to equity levels.”

According to the 2012 Global Entrepreneurship Monitor (GEM) South Africa report, only 14% of individuals intend to pursue a business opportunity within the next three years. “This is below the average of 27% for efficiency-driven countries.”

Botes says that this low percentage could be attributed to the obstacles and challenges entrepreneurs are likely to encounter along their entrepreneurial journey.

“Increasing costs which entrepreneurs do not have control over, such as electricity, rates and taxes and unionised labour forces, are factors entrepreneurs have to bear in mind. These rising costs provide a constraint to South African entrepreneurs as they can’t compete against illegal cheap labour practices by competitors and imported products coming from areas where costs such as energy, municipal charges and labour are much lower.”

He adds that limited appropriate entrepreneurial training and development programs being implemented is also a constraint, and one of the key reasons why such a large percentage of new businesses fail. “A lack of education and training reduces management capacity and limits the survival and growth of new businesses.

“This downfall can however be improved with more appropriate and practical entrepreneurship training at primary, secondary and tertiary level. Creating additional incubators where entrepreneurs can be monitored and mentored during their first five years of startup will also aid entrepreneurship.”

Botes says that for entrepreneurship to flourish, South Africa needs to change the way the spirit of enablement, empowerment and real support of entrepreneurs is practiced.

“Influencing government legislation, in not only how the country facilitates the subject of entrepreneurship in schools, but also what legislation should be put in place to ensure that a healthy legal environment in which entrepreneurs can operate, is vital to promoting entrepreneurship.

“Such a healthy environment would include electricity rebates for small and medium enterprises (SMEs) within their first five years of operation and improved incentives to employ more people, as well as relaxed compliance to laws, by-laws, rules and regulations.

“We must revert back to acknowledging and promoting entrepreneurial excellence as the norm and not the exception and in turn, develop a new standard of excellence in entrepreneurship all over South Africa,” concludes Botes.

Why EOY is valuable to the entrepreneurial community

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2013 competition entrant, Richard Qonto, shares some information with us about his business and discusses why he decided to enter the competition this year.

Briefly describe your business and the industry you operate in?

Pendairies (Pty) Ltd is an authorised Parmalat distributor based in the Western Cape. My key business functions comprise of marketing and selling Parmalat products to retail outlets and wholesalers.

Where did the business concept originate from and when did you start your business?

After participating in the sales industry for 10 years, I noticed that although Parmalat dominated the dairy market nationally, the company had a weak position within the Western Cape. As a result of this I established Pendairies (Pty) Ltd in 2007 and became an authorised distributor for Parmalat within the region.

Have you always aspired to start your own business?

Yes, while I was an employee I always had a desire for something more. Being an entrepreneur generates a great sense of fulfillment within my life.

Briefly describe some of the challenges that you have experienced as an entrepreneur?

Access to finance is always a challenge to small businesses due to insubstantial collateral. This makes competing with experienced stable businesses with sound financial backing a tedious task.

Being able to apply for access tenders and supply big organisations requires entrepreneurs to have access to resources and adequate experience, which many don’t possess. These factors obviously negatively affect the development of your business.

What advice would you give to aspiring entrepreneurs?

Being your own boss comes with a lot of sacrifice, commitment and discipline. If you stay focused and set out clear business goals, the sky is the limit.

Where do you see your business in the next five years?

My vision is to own a farm and become a producer. I intend on developing my own brand instead of promoting other companies’ brands. This will result in me ultimately being a job creator in South Africa and actively contributing towards our country’s economy.

What does a day-in-the-life of Richard Qonto consist of?

My day consists of looking for greener pastures and opportunities in the business community. I spend a lot of time clearly defining my goals and targets, and set strategies to achieve them in the best way we can.

Why did you decide to enter the Sanlam / Business Partners Entrepreneur of the Year® competition?

I believe that this is a great platform for me to interact and network with other small business owners, as I believe that the community should share information and learn from each other. Together, SMEs and entrepreneurs can identify market opportunities that they originally may not have been aware of.

Why would you recommend that fellow entrepreneurs get involved with initiatives such as Sanlam / Business Partners Entrepreneur of the Year®?

Entrepreneurs should enter to learn about new developments in the industry and how best to stay ahead of their competition. Exposure to new trends in the market and the growth of entrepreneurship will only strengthen your business.

Celebrating entrepreneurial success at the 2013 EOY business workshops

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In order to celebrate entrepreneurial excellence, Sanlam / Business Partners Entrepreneur of the Year® (EOY) have been staging business workshops around South Africa to create platforms for entrepreneurs to network and learn from each other. During April, workshops were held in Nelson Mandela Bay, as well as Pietermaritzburg.

In Nelson Mandela Bay guests were addressed by local successful entrepreneur and former EOY winner, Mzukisi Stephen Dondolo, who is chief executive officer of investment firm African Pioneer Ltd. Dondolo discussed the importance of entrepreneurship in South Africa, while paying homage to the competition, which he believes is playing an active role in fostering entrepreneurship.

He said that entrepreneurs need to band together and lobby Government in order to improve the environment for SMEs. “Government needs to pay more attention to the need for SMEs in South Africa, as they are able to address the high level of unemployment.”

Dondolo said that it was a great honour to speak at the workshop as both Business Partners Limited and Sanlam have contributed to growing small businesses in the country.

Duncan Paul, a highly successful entrepreneur with eight thriving businesses, spoke at the workshop in Pietermaritzburg. His advice to entrepreneurs is to ‘set goals and never give up’.

Paul shared the story of starting his entrepreneurial journey and discussed the difficulty he experienced when sourcing funding for his business.

“I had a big vision, which scared the formal banking sector, and I couldn’t raise money anywhere. Business Partners Limited has always been in the right place at the right time for me.”

While working to commercialise wildlife utilisation within Bophuthatswana national parks, Paul realised how systems and disciplines in a business could pay off, and decided to make a go of it on his own by founding Hunters and Guides with eight other partners. He says that the involvement of Business Partners Limited has brought the same benefits to his businesses today.

“I have learned from them. Byron Jacobs [Business Partners Limited’s regional general manager for KwaZulu-Natal] is a mentor to me and has guided and advised me through troubled times.”

During his address Paul shared personal business lessons that he has learnt over the years. Advising entrepreneurs to remain steadfast and follow their passion, Paul also recommended that entrepreneurs should be cautious when selecting partners, but should never burn bridges.

“Do the right things in everything you do, and doors will open,” said Paul when advising guests to lead a life of integrity.

Both entrepreneurs addressed key issues facing all entrepreneurs, while reiterating the importance of developing SMEs in the country. They are both great examples of entrepreneurial success stories and evidence of why more should be done to celebrate entrepreneurial excellence in South Africa.

Estate planning and the business owner

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By Clive Hill (Legal Adviser: Sanlam Trust)

As a business owner, time-management is your greatest challenge. You need to focus 100% on your business, but can’t afford to lose what you have worked so hard to build up. At the same time, you want to do what is best for your family and, at the same time, ensure that your business stays successful as you, your family and employees also rely on the income it generates.

Just like you are an expert in your field, you respect the value an estate planning expert can add to your financial planning. A few hours is all it takes for an estate planning expert to gain an understanding of your particular needs. This insight will enable him to give you sound advice which could secure your financial future.

Consider John Canoli. He is a successful franchise owner, focused on making his business a success. His business partner, a few years younger, is equally committed. But neither of them has stopped to think of the consequences if something happened to either or both of them. They are assuming that their wives would simply take over. With some good estate planning, they could ensure that the business is not left without hands-on management, that their Wills are up to date, and that there is enough cash to meet the costs of winding up their deceased estates. Their families will benefit from a well-considered estate plan, and their employees will be thankful that the business is able to continue to provide them with a livelihood.

As a business owner, you have to consider the following:

  • the cost to the business should the owner/s or any key staff member die or become disabled through accident or illness;
  • the effectiveness of the Last Will and Testament and the abilities of the executor;
  • the protective role a Trust offers in holding business and/or personal assets;
  • retirement from an active working life and investing over time to provide a private pension.

Another critical element to consider is this;: should you plan your estate separately for business needs and for family needs? The two are indeed very different. The area of business estate planning usually involves business assurance and buy-and-sell agreements. However, unless the business is owned entirely by a trust, the proceeds from business planning will usually impact the personal estate of the owner and therefore his family. Even with a trust structure in place, the family members are likely to be beneficiaries of that trust and therefore it should be taken into account when planning for their future financial needs. In other words, it is normally impossible to completely separate your business planning and your personal and family financial planning. An experienced estate planner will seek to tie up all loose ends, avoiding a situation where a contingent business liability ends up affecting the family finances.

So remember, it’s what you don’t know that is the most dangerous. Equip yourself with the tools needed to ensure adequate estate planning by speaking to your fiduciary specialist today.

Protect your business; cover your assets

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Any business operation is vulnerable when faced by unplanned crises. The crippling and unexpected costs associated with these risks are often compounded by failure to protect the business adequately through appropriate short-term insurance.

Although the greatest losses are usually experienced when a business is not insured; under-insuring your business can prove to be just as detrimental.

Underinsurance is one of the most worrying challenges facing South African businesses. Generally, business owners often fall into a trap of underinsurance because they do not fully grasp the repercussions or do not have the time or expertise to navigate the wide spectrum of insurance products available. So how can you insure that you avoid the pitfalls?

  • Choose the right insurance partner: Choose an insurer that has a good claims payout reputation and is financially secure enough to cover your risk.
  • Identify all potential risks to your business, these could include:
    • Natural perils (wind, storm, hail, lightning, flooding, etc.)
    • Crime related perils (burglary, armed robberies, theft of vehicles/hijacking, etc.)
    • Accidental damage (motor accidents, damage to computers, etc.)
    • Legal liabilities (due to products being sold/repaired, motor accidents where the insured/driver is negligent, etc.)
  • Evaluate these risks in terms of the likelihood of them happening and the potential size of the loss, for example:
    • The likelihood of having a motor accident is high and the size of the loss would be medium to large (a vehicle being written off as well as damage to a third party’s vehicle/property)
    • The likelihood of a fire at the premises is low, but the size of the loss would normally be high to extremely high.
  • Consider your location and associated risks: Some commercial areas are more risky than others. If your business is located below the flood plain on the banks of a river, there is a high probability that you will suffer loss, and you need to make sure that you have sufficient cover to manage this risk. The same goes for areas that suffer higher levels of crime. If you don’t have a choice but to be at a specific location, you can still reduce your risk by implementing changes to protect yourself and your livelihood, including the addition of burglar bars or alarms if you’re in a high-crime area.
  • Proactive risk management. Using the information above, a business owner should decide whether some of the risks can be eliminated or reduced.
    • Installing an alarm and burglar bars reduces the likelihood and impact of potential burglaries.
    • Arranging with suppliers to deliver stock instead of collecting your own eliminates the risk of loss or damage to goods while in transit.
    • Prevent physical hazards that could lead to claims. Have your geyser, wiring and fire protection gear checked for leaks or damage on a regular basis, either by someone in the office or by a professional.
  • Finance the residual risks (i.e. the risks that can’t be reduced to an acceptable level). The most common method of financing the residual risk is through dependable insurance, this would also be the most viable option for the small business owner.
  • Insure your business for the appropriate amount: Many business owners are unaware whether they are over or under-insured. If you under-insure your business or assets, there is a chance that the payout you receive when claiming is lower. Ask your broker to help you assess your risks.
  • Take advantage of the benefits derived from successful risk management: Insurance companies are more likely to reward customers that take risk management seriously. People and companies that are serious about managing their risk take stock of their assets, measure the potential risk and insure them for an appropriate amount. Being under-insured can also lead to lower insurance payouts when claiming. From time-to-time, savvy risk managers also check equipment like geysers, fire equipment and so forth for damage or faults that can lead to more severe damage.
  • Ask for advice and communicate changes: If you’re not sure what to insure, ask your broker for advice on risk management. He or she will be able to advise you appropriately and save you valuable time to concentrate on building your business. If you make any changes to your business, including the installation of walls or fences, additional buildings, add another vehicle, and so forth, communicate these to your broker as soon as they happen.

Contact your broker for more information or call Santam on 0860 444 444

Information provided by Santam

Why entrepreneurial skills are important for a business

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This month we chat to Justin Hawes of Scan Display, who was one of the finalists in the EOY 2012 competition about how he manages to instil entrepreneurial skills within his business.

justin-webHow do you develop entrepreneurial skills within your business?

With freedom comes responsibility. Therefore my management style is very much one of making each employee accountable for their actions. I do not meddle in how they get a job done, or what hours they work, but give them the freedom to achieve the results we need in the way they want to. This in turn encourages an entrepreneurial spirit in the company.

This is especially true for our Account Executives. They effectively run their own business within Scan Display: they manage the entire process of quoting, closing sales, project managing each job to completion and following up on payments. To facilitate this, I empower them to make their own decisions, such as which of our solutions to offer clients and choice of supplier. This impacts their earnings, so they are very responsible in how they handle it.

Of course, I need to identify the right kind of personality for this role. I need to have Account Executives who are comfortable with this responsibility. In addition, we also have systems in place that ensure we are delivering a uniformly high quality product to our clients.

Why is the development of entrepreneurial skills so important?

By ensuring Scan’s staff are responsible and empowered, and able to be creative with their solutions, our business is able to run more efficiently. I also believe our staff members enjoy this working environment as they feel stimulated and challenged. But they also always know they can come to me with questions and concerns – my advice and support is always available.

Do you think that because of your focus on these types of skills you have an advantage over competitors?

Yes, without a doubt. Our Account Executives drive our business forward, and they would not be able to drive it so quickly if they were not empowered in this way.

Why should fellow entrepreneurs look to do the same within their business?

If you empower your staff members to act as entrepreneurs, they are more committed to their work. They take ownership of their role and are hungry for success. We reward our Account Executives financially, and they make commission from the first R1 they sell out of every job they do. This keeps them fully invested in the business and its success.

Why is entrepreneurship so important for South Africa?

All the greatest countries in the world have a culture of entrepreneurship, and it stimulates economic growth and development. The United States is a prime example of this, as anyone can start a business venture, and it is easy to move in and out of different businesses. India is also an example of a country in the developing world where people are coming up with creative businesses that bring value to the market and give them an income.

When I was recently there, I had the sense that everyone had a job, from laundry people (“debwashers”) to the people who collect lunch boxes from homes to deliver to their owners at work (“tiffin-carriers”). Everyone is busy doing something, and earning something.

By encouraging entrepreneurship in South Africa we will be able to stimulate job creation. Rather than relying on the government to create jobs, people will be in a position where they can create their own jobs – and ultimately more jobs for other people too.

Our 2012 winners share the benefits of entering the competition

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The 2013 Sanlam / Business Partners Entrepreneur of the Year® competition is officially open for entries! We asked our 2012 winners about the various benefits that they have seen as a result of the competition thus far, as well as their advice for potential entrants.

William Duk of The Plantation Shutter Co: Overall Sanlam / Business Partners Entrepreneur of the Year® winner

“Although I think it is still too early to measure the precise financial impact, but the positive media exposure that we obtained following winning the award, is beyond comprehension. Over time, this in turn translates into a significant positive financial impact. No marketing budget could ever be big enough to purchase the level of exposure that has been generated. I feel that we could relate to someone coming from relative obscurity and winning an Olympic Gold.

Winning the award is the best possible public acknowledgement that an entrepreneur and his or her business can receive for all the effort and hard work that goes into building a business. For me, the award is not about “me”, but rather about every single person in the business that has contributed during our journey thus far. The resulting energy can definitely be felt in the business.”

Tabisa Nomnganga of Bravo Promotions: Emerging Entrepreneur of the Year

“To be awarded the Emerging Entrepreneur Award in 2012 has increased my confidence, as well as my client base. Since winning the award in September my bottom line profits have definitely increased by over 40% from the previous financial year, and the publicity I received provided me with a platform to let the people know I have a worthy business. I would definitely encourage entrepreneurs to enter the competition in order to see how their business ideas fare in front of the experts.”

Madelé Ferreira of Mooihoek Boerdery: Job Creator of the Year

“The prize money that I received has made it possible for me to plan a trip to California in order to visit research facilities where new plant materials and new strawberry cultivars are being developed. The award has also boosted the professional relationship between Mooihoek Boerdery and the various chain store groups that we supply to. In addition, the award has lead to recognition in the form of an award by the Kouga Municipality (Eastern Cape) Business Chamber.

This award boosted the faith that I have in myself. I could never have imagined that one day my business and I would win such an award, or grow to be such a successful enterprise.”

Stuart Forrest of Triggerfish Animation Studios: Innovator of the Year

“Triggerfish had been operating under the radar for many years, and our focus had been on our projects – not on our business. We decided that the company needed to raise its profile, so entering the competition was a great opportunity to do that. We were beginning to talk to funding partners and strategic partners, and we needed to expand our network and increase our credibility.

Winning the Innovator of the Year was perfect, because we were looking for partners who were attracted to innovation. It’s been very helpful to say at the bottom of our introductory email to potential clients that we were chosen as Innovator of the Year by prestigious brands such as Sanlam and Business Partners. It means that there has been a certain level of analysis performed and we have been recognised as a valuable company.”

Trevor Davids of Trevor Davids Plumbing: Medium Entrepreneur of the Year

“Winning the 2012 Medium Business Entrepreneur award was an awesome experience, which drew a positive response from all of our clients. I advise 2013 participants to remain positive no matter the difficulties they may face. Considering the current economic climate, they should be proud that they have been considered, as this is an achievement in itself.”

Warren Graver of Envirodeck: Small Entrepreneur of the Year

“Winning Entrepreneur of the Year® has benefitted Envirodeck tremendously due to increased mainstream publicity – which often proves unaffordable for a small business. In addition, the networking opportunities that the competition provides has also helped me make better business decisions, due to sound advice that I have received from successful entrepreneurs.

A 2013 entrant should have a strong understanding of how marketing and finance combine to make a successful business. This needs to be conveyed in an overall business plan that is simple for the judges to understand. Remember that simplicity in presentation is key and that key facts should be elaborated on in order make your business stand out.”

Entrepreneurship challenges

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The failure rate of start-ups is exceptionally high – why do these businesses fail?

It is a known fact that the main reason for business failures is management related. It is often intelligent, honest, hard working people that fail. They either do not have the typical entrepreneurial traits required to make a success, or they lack the relevant experience.

I believe that inadequate exposure to that particular business offers the explanation. A successful professional that has been exposed to a corporate environment may find it difficult to understand the typical “tricks of the trade”. The HOW of the business. Without the exposure it can be unfair on the entrepreneur to make a success. After all you need time to learn.

What in your opinion are the dangers in running a business?

There are many dangers that one can list, but I want to address five most prominent:

  1. The first danger is the entrepreneur themselves. Because they have been successful, they start relaxing and complacency replaces that initial enthusiasm, self-drive and sharpness. They do not focus on the important issues as they did years ago and they accept many things as a given, rather than investigating first.
  2. The entrepreneur spends less and less time at the business and allows others to run the business. Can anyone else be as passionate about the business and the success of the business as the entrepreneur? They may prefer to while away time elsewhere, whether it is overseas visits, excessive hours on the golf course and spend business time on, albeit well deserved, community projects.
  3. Poor cash flow management. Many profitable businesses fail because of a lack of sufficient cash flow. It is a vicious circle. As soon as the business is cash strapped, the focus of the entrepreneur changes. Instead of spending time making money, they spend time collecting debts, making arrangements with the creditors and negotiating extended facilities. It becomes survival mode which is not good for business success.
  4. Marketing. The market and behaviour patterns change continuously. It is for the entrepreneur to stay in touch with the latest trends and tendencies. What worked some time ago does not necessarily apply today. Marketing techniques are also dynamic and not to market is to die a slow death. Marketing obviously involves much more than just advertising.
  5. Costing. This applies in particular to manufacturing concerns. The entrepreneur (or someone else) will perform a costing exercise and use these values for a long period of time. If it is not reviewed and re-evaluated as and when the price of material or labour changes, then costing becomes ineffective and irrelevant, and makes the setting of selling prices an impossible task.